Goldman Sachs has launched coverage of Qualcomm with a Neutral rating and set a 12-month price target of $135, saying the chipmaker’s expansion beyond phones into automotive and industrial markets is being counterbalanced by increasing pressure in its core smartphone franchise.
The bank’s price objective represents about 6% upside from Qualcomm’s closing share price of $127.11 on Friday, according to Goldman’s calculations.
Valuation and near-term view
Goldman analyst James Schneider noted Qualcomm is trading at roughly 12 times forward earnings, about 2 times below its three-year median multiple of 14 times. That valuation, Schneider wrote, suggests a balanced risk-reward profile for investors at present.
Schneider’s assessment centers on a juxtaposition of secular opportunities outside smartphones and mounting challenges within the handset market. Together, those forces inform Goldman’s Neutral stance and the bank’s measured upside expectation.
Smartphone challenges
Goldman identified two principal sources of weakness in Qualcomm’s phone business. First, the firm has been losing premium-level share at Chinese Android handset makers to MediaTek, as competitors have narrowed the performance gap with Qualcomm’s Snapdragon family. Goldman models a roughly 200 basis point revenue share decline to MediaTek in the Android market through 2027.
Second, Apple’s move to internal modem designs is an accelerating headwind. Goldman projects Apple’s contribution to Qualcomm’s chip revenue will fall from about $7.2 billion in fiscal 2025 to $1.9 billion in fiscal 2027, and to nearly zero by fiscal 2028. "Apple has progressed well on its internal-modem strategy, and we expect increasing use of internal modems for future iPhone generations," Schneider said.
Goldman also flagged near-term demand weakness across the industry, modeling a 6% year-on-year decline in smartphone unit volumes in 2026. The bank attributes part of this softness to higher memory prices tied to AI-driven demand, which it says could weigh on consumer spending.
Diversification tailwinds: automotive and industrial IoT
On the positive side, Goldman highlighted Qualcomm’s progress in automotive technology, where the company has developed a meaningful position in digital cockpit solutions. The bank notes Qualcomm’s automotive revenues have increased fivefold since 2020 and forecasts automotive revenue growing at a 22% compound annual rate from fiscal 2025 through fiscal 2028.
Industrial Internet of Things exposure is also seen as improving, with Goldman modeling 20% growth in that segment in fiscal 2026. "We see Qualcomm’s diversification efforts partly offsetting these headwinds, driven by strength in automotive and industrial IoT," Schneider wrote.
PC and datacenter ambitions face hurdles
Goldman cautioned that Qualcomm’s plans for ARM-based Windows PCs and a new datacenter product line face execution and adoption risks. Software compatibility remains a persistent obstacle for broader uptake of ARM-based Windows laptops, the analyst said. On datacenter chips, Goldman said it is awaiting more execution detail and noted an increasingly crowded competitive landscape with limited customer traction so far.
Concluding its initiation, Goldman reiterated the Neutral rating and said: "With the stock trading at 12X (2X below its three-year median), we see a balanced risk/reward for the stock at these levels."